Starting a family is very exciting, but this lifestyle change can be filled with ambivalence. Unemployment is rising, and times are tough. If you don’t plan the financial future of your family, anxiety will be a thing you constantly deal with.
A good philosophy to live by when starting a family is: control the things you can control. How can you do this?
1. Build a Cushion.
What would happen if you lost your job? When starting a family, you will need an emergency fund to fall back on in case the economy becomes shaky. One great way to cushion your family’s financial future is to get an affordable life insurance.
Manulife Philippines explains that there are three different types of life insurance plans: term life insurance cover, universal life insurance, and whole life insurance. Each comes with different features.
For example, Term life insurance provides financial protection for given period. In case you lose your job, the proceeds can cover your lost income and provide a safety net for your beneficiaries
2. Save for your child’s education.
If you plan to have multiple children, think about providing support for college. According to recent data from college board, today, the average cost of college is $43,700 per annum.
If you assume an annual increase of five percent, within 18 years, the cost of putting your child through a four-year program will cost over $450,000. To defray these costs, start planning early. Analyze and manage your cash flow to determine how much you can start saving for your children.
3. Avoid credit traps.
If you have credit cards, make a habit of paying any money you owe before interest is due. Doing so will help you avoid getting fined. If you can, avoid using credit cards to get cash advances.
The interest rates for cash advances are usually higher, and the charges begin immediately. When starting a family, you want to void debt as much as possible. Always find a way of living within your means.
Securing the financial future of your family will wipe off uncertainty giving you and your family a peace of mind. The first step to securing their future is to start today with what you have.